Third-Party Effects

Abstract

Most theories about effects of social embeddedness on trust define mechanisms that assume someone’s decision to trust is based on the reputation of the person to be trusted or on other available information. However, there is little empirical evidence about how subjects use the information that is available to them. In this chapter, we derive hypotheses about the effects of reputation and other information on trust from a range of theories and we devise an experiment that allows for testing these hypotheses simultaneously. We focus on the following mechanisms: learning, imitation, social comparison, and control. The results show that actors learn particularly from their own past experiences. Considering third-party information, imitation seems to be especially important.